Mortgage Application Donegal

first-time-buyers-mortgage-advice-donegalPrepare for your mortgage application

The right preparation can significantly improve your chances of being approved for a mortgage.
Here are 7 steps to help you prepare for your mortgage application.

7 steps to get mortgage ready

Buying your first home is exciting, but the mortgage application process can seem quite daunting. As a first-time buyer you’ll need to gather lots of financial information and there’s so many new terms it can seem like learning a new language. In essence you need to build your financial CV

Our seven steps aim to help prepare you for your mortgage application, decrease the stress of it all and increase your chance of success.

1. Save for a deposit

If you’re a first-time buyer, you’ll need to start saving for a deposit. If you own a home, you should find out how much equity the property has, and whether you have enough deposit for the house you want to move to.

Our guide below includes how much deposit you’ll need, and tips to reduce your spending.

If you need to save, you could set up a standing order for an amount you can afford to save each month, you should keep this money in a separate account, so you’re not tempted to spend it.

What is a mortgage deposit required?

The mortgage deposit is the cash you pay upfront when buying a house. The money pays for your property along with the mortgage.

The larger your deposit, the less you have to borrow to cover the cost of your home and a low loan to value (LTV) can often help you secure the most competitive interest rates.

All lenders require a mortgage deposit when you buy a residential property in Ireland. Asking you to put down a deposit on a property protects mortgage lenders if you fall behind on your repayments and reduces their risk of lending.

How much deposit do you need for a mortgage?

It’s a proportion of the house value, so the deposit amount will depend on the price of the property you want to buy.

In Ireland you’ll need a deposit of at least:

  • 10% if you’re buying your first home
  • 20% if you’ve owned a property before
  • 30% if you’re buying a property to rent out

The size of your deposit and LTV will also have an effect on the deals you’re eligible for.

Don’t forget to factor in stamp duty and solicitors’ fees into your total costs.

2. Check your credit record

Your credit record affects what you can borrow, so you should check your report before the lender does.
If you’ve got arrears showing on your credit history, you may need to wait until the issue is removed from your history before a lender will be offer you a mortgage. A resolved issued sits on credit history for 5 years. If there is a unresolved issued on your credit history, lenders may not at all.

Checking your credit record

If you’re curious about your credit score, or worried about arrears in the past affecting you getting future borrowing, checking your credit report is easy. Here’s how to check your credit history, your credit check rights, & what your credit score means.

Why should you check your credit report?

It’s good to review your credit history on a regular basis and always before you apply for credit. You’ll be credit checked if you’re planning to:

  • Take out a loan
  • Get a credit card
  • Apply for a mortgage
  • Buy a bill pay mobile

Lenders check your credit record to decide whether they will lend to you, and how much your borrowing will cost.

They also use it to check your name and address details are accurate, so make sure these are correct and up to date.

You can check your credit history and request a record for free on the Central Credit Register website.

Even if you think your credit record is good, you may discover things on your report you didn’t know about. It can flag up things like:

  • Arrears on an old loan you’d forgotten about
  • A loan still showing as outstanding, that’s actually been cleared
  • Loan arrears that have long been paid off
  • Credit that you didn’t apply for – you may be a victim of impersonation

It can also remind you of when you last had arrears and how long you’ve been free of them. This can be useful when choosing a lender, because some have stricter lending criteria than others.

Your credit check rights

If you do find something on your report that you disagree with or you think is incorrect, you have the right to:

  • Add a statement of up to 200 words
  • Apply for the information to be amended
  • Report suspected impersonation

You should report any errors to the lender in question, not the credit agency, because it’s the lender that must request for the information to be changed. The credit agency can not change you credit history record.

3. Get your finances in order

Whether your credit report is good or bad, there are some dos and don’ts when it comes to applying for a mortgage:

Do

Don’ts

Pay all your bills on time

Avoid dipping into your savings

Set a budget to enable you to save

Avoid getting new credit e.g. a car loan

Save a regular amount each month

Avoid changing jobs, if possible

Pay rent through by EFT from your account

Don’t have unpaid’ s on your account

Reduce your credit, including arranged overdrafts

Don’t let gambling show on your account

If you’re self-employed, chase any outstanding invoices and keep your accounts up to date.

You’ll be required to produce bank statements and credit card statements for review. Keeping your general spending to a minimum will help increase your borrowing potential.

4: Find out how much you can borrow

Understanding how much you could borrow can help you work out your budget to buy a property.

The Central Bank mortgage measures, set Loan to Value (LTV) and Loan to Income (LTI) limits for first time buyers, and those who already own a property.

The measures set ceilings on the amount of money that can be borrowed to buy residential property using:

  • Loan to Value (LTV) limits
  • Loan to Income (LTI) limits.

Loan-to-Value limits

The LTV limit requires you to have a minimum deposit before you can get a mortgage. The size of this deposit depends on what category of buyer you are.

  • First-time-buyers need to have a minimum deposit of 10%
  • Second and subsequent buyers need to have a minimum deposit of 20%
  • Buy-to-let buyers need to have a minimum deposit of 30%.

Banks and other lenders have the freedom to lend a certain amount above these limits. In any one calendar year they can give an allowance to:

  • Up to 5% of the value of mortgages to first time buyers
  • Up to 20% of the value of mortgages to second and subsequent buyers
  • Up to 10% of the value of mortgages to buy-to-let buyers.

Loan-to-Income limits

The LTI limit restricts the amount of money you can borrow to a maximum of 3.5 times your gross income. So, for example, a couple with a combined income of €100,000 you can borrow up to a maximum of €350,000.

Once again banks and other lenders have the freedom to lend a certain amount above these limits. In any one calendar year they can give an allowance to:

  • Up to 20% of the value of mortgages to first-time buyers
  • Up to 10% of the value of mortgages to second and subsequent buyers

We are not alone in Ireland in introducing these kinds of mortgage measures. Many other EU countries have introduced some form of mortgage regulation to help safeguard their national financial systems.

How much can you borrow

Whether you’re a first time buyer starting out on your mortgage journey, a home mover looking for a larger property, or a landlord looking to invest, the first step in your mortgage application is finding out how much you can borrow.

This simple calculator will give a guide to much you might be able to borrow based on your income and deposit.

This how much you could borrow calculator works out the much you might be able to borrow

What affects how much you can borrow?

There are several things that affect how much you can borrow. Here’s the main factors that lenders take into account when assessing your mortgage application.

  • The type of mortgage you want: e.g. first time buyer, self-build, buy to let, bad credit etc.
  • The type of borrower you are: for instance if you’re a first time buyer, switcher, home mover or buy to let investor.
  • Your income: or combined income if someone else is applying for the mortgage with you.
  • Your age: If you’re an older borrower, this may limit your mortgage term, and therefore, how much you can borrow.
  • Number of dependants: If you have children under 18, some of your income will be used to support them.
  • Your existing credit commitments: such as loans, credit cards, overdrafts, hire purchase agreements or car finance.
  • Other monthly outgoings: e.g. childcare costs, household bills and insurances.
  • Your credit history: and how responsibly you have repaid loans and credit in the past.

You can check your credit history and request a record for free on the Central Credit Register website.

5. Research home buying initiatives

If you need an extra helping hand to get on the property ladder, there are some government backed schemes that could help.
Different initiatives offer different benefits, such as:

  • Reducing the amount, you need to borrow
  • Considering you if you’ve been declined by other lenders
  • Offering the same interest rate throughout your mortgage term

These schemes:

Help to Buy Scheme

The Help to Buy Scheme offers a tax refund for first-time buyers of newly built homes.

First Home Scheme

The aim of the Scheme is to bridge the funding gap for eligible first-time buyers between their deposit and mortgage, and the price of the new home

Local Authority Home Loan

The Local Authority Home Loan is a government-backed mortgage administered by the local authorities.

Mortgage Allowance Scheme

An allowance of €11,450 over 5 years is payable to local authority tenants, tenant purchasers and some housing association tenants who take out a mortgage to buy or build a house.

Shared Ownership Scheme

This scheme enabled low-income purchasers to buy a proportion of a home to begin with, increasing in steps until the whole house was owned. It has now been stood down.

Affordable housing schemes

New affordable housing schemes were announced in 2021. The new local authority scheme is now providing affordable homes in certain local authority areas, and the national scheme is due to open in July 2022.Affordable housing schemes help eligible first-time buyers to buy homes at below their market price.

The Citizens Information website includes details of the current schemes available to first time buyers.

You’ll need to meet the eligibility criteria of a scheme to qualify.

6. Get your documents together

There are a several documents you’ll need to apply for a mortgage. What’s required will vary depending on the lender, and whether you’re:

  • A first-time buyer
  • Self employed
  • Building your own home

When applying for a mortgage the following may be needed for all applicants.
This list is for guidance only and different lenders may not require everything in this list

  • Photographic ID (originals or certified copies)
  • Address verification
  • Proof of PPSN
  • Most recent 6 months’ bank account statements (for all bank accounts)
  • Most recent 6 months’ online bank account statements (i.e. Revolut)
  • Most recent 6 months’ savings account statements (if applicable)
  • Most recent 6 months’ credit union statement (if applicable)
  • Last 6 months’ credit card statements (if applicable)
  • 12 months’ statement on all loans if applicable
  • Most recent mortgage statement for all mortgages (if any)
  • Foreign Credit History Report, English version, (if living in, have a loan or bank account in any country outside Ireland)
  • Gift letter (if getting a gift for the deposit)
  • Copy of your Marriage Cert (if applicable)
  • Copy of your Divorce or Separation agreement (if applicable)

If you are an Employee, paying income tax under PAYE

  • Up to 2 months’ recent pay slips
  • Most recent Employment Detail Summary
  • Salary Cert completed by your employer

If you are Self Employed or Director
If you own more than a 25% shareholder of a LTD company, lenders will class you are self-employed even though you are being taxed under PAYE.

  • 3 years’ accounts
  • 3 years’ revenue notice of assessments/ chapter 4
  • 3 years’ form 11
  • Confirmation of Tax Clearance cert
  • Most recent 6 months’ business bank account statements (for all bank accounts)
  • 12 months’ statement on all business loans

If you are self-building

  • Breakdown of build costs (Your lender will provide the template)
  • Copy of architects’ PI cover
  • Copy of planning permission
  • Copy of plans
  • Copy of ordinance survey/ site map
  • Gift letter if site was gifted (template available from your lender)

7. Shop around for a mortgage

Once you have most of your deposit saved, it’s time to find a mortgage deal. You can do this yourself, or with the help of a mortgage broker.

You’ll then need to choose either a:

  • Fixed rate mortgage: where your interest rate and payments stay the same.
  • Variable rate mortgage: where the interest rate can go up and down, and your payments can change.

Interest rate types

Choosing a fixed rate or variable rate mortgage will affect your repayments and whether they’re set for a period of time or changeable.

What is the standard variable rate?

A standard variable rate is the lender’s variable rate that you’ll switch over to when your fixed rate period ends. It’s usually very expensive, so shop around and switch to a cheaper deal.
A variable rate is linked to ECB interest rates so monthly payments may rise or fall.

What is a Fixed rate mortgage?

A fixed rate keeps your monthly payments the same for a set term, normally between one and 10 years. There are a few lenders now offering fixed rates up to 30 years. Normally the longer the fixed period the high the higher the interest rate will be, this is not always the case though.

What happens next?

Once you’ve found your mortgage deal, you can start your mortgage application with your chosen lender.

Start your mortgage application

The first stage of your application is often to get a mortgage Approval in Principle (AIP) which is an indication of what a lender will lend to you, but not a guarantee. If you’re approved for an AIP, you’re a step closer to getting full mortgage approval.

What is a mortgage Approval in Principle?

An Approval in Principle (AIP), is a letter from a lender showing the amount they could lend you, based on some initial checks.

It is valid for six months. It can be extended quite easily if your circumstances haven’t changed during that time.

Why do you need an Approval in Principle?

If you make an offer on a property, you’ll have a better chance of success if you have a mortgage Approval in Principle. This is because it shows you’re likely to be approved for a mortgage. In most circumstances now the Estate Agents are asking to see “proof of funds” before accepting an offer.. This is here the AIP is important.

It isn’t a guarantee of a mortgage or a particular deal at this stage, but it can help to show you’re a serious buyer.

An Approval in Principle confirms how much you can borrow with a mortgage, and this will help you to stay within your budget.

The interest rate used for the AIP isn’t necessarily the rate you’ll get for your mortgage.

This is because it may be several months until you find a property and are ready to drawdown your mortgage, by which time, the rate may have changed.

What happens once you have an Approval in Principle?

Once you have your AIP in place, there are several more steps to take before you’ll be ready to move into your new home:

  1. Search for a new home

As well as your AIP, you’ll also need to have enough deposit saved for the property you buy.

You should also find a solicitor for the legal work involved in buying a house, and factor in their fees, plus surveyor’s fees and stamp duty, 1% of the purchase price up to €1M, to work out your total costs.

  1. Get insurance in place

It can take a while to sort out mortgage protection insurance – which is compulsory when buying a family home, so ideally you should apply for a policy before you’re at the offer stage on a property. It can be optional for investment properties but is recommended.

Our mortgage protection and other mortgage insurance guides, walk you through all the different types and how to find the right policies for your circumstances.

  1. Make an offer on a property

Once your offer is accepted on a property, let your lender know. They’ll help you to arrange a valuation of the property and finalise your mortgage details.

You should also arrange a structural survey and or mica test of the property to check for any unseen damage. It’s not too late to pull out of the sale at this stage.

  1. Get a letter of offer

You’ll need to provide your lender with any outstanding documentation shown in your AIP so they can then issue you with a formal letter of offer. This is likely to include:

  • Last 1 month statement for your current account, showing your salary lodgement
  • Most recent payslips

You should review the offer carefully which contains details of things like the mortgage rate, term, total balance, before signing it.

  1. Exchange contracts

This is the stage where you pay your deposit and sign and exchange contracts.

You’ll need to put in place buildings insurance if you haven’t already. It’s compulsory and you may have to prove you have it before the funds can be released.

  1. Release your mortgage funds

Your solicitor will arrange to transfer the remaining balance on the property in exchange for the title deeds.

You can now move into your new home!

Different circumstances?

Not every mortgage applicant is the same and everyone has unique borrowing needs, so we’ve created some helpful guides to fit different circumstances.

Still Unsure?

Why not take advantage of our First Time Buyers Mortgage Review, which will give you a professional assessment on how ‘Mortgage Ready’ you are now.

What some of our happy Mortgage Application customers have to say…

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Pascal and team were very helpful when we were buying our home. We had a couple of issues with the sale and the team helped push along the sale. Pascal was very knowledgeable and it was a pleasure working with him. Definitely would recommend him to anyone looking for a mortgage.

5
Peter Kelly
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I have to say my experience of working with Pascal was second to none. When looking for my mortgage ,which was a bit complicated Pascal worked very hard and put me in the right direction to solve the situation. He was very professional in all aspects of his work and I can recommend him as a financial advisor.

5
Annie Gallagher
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I Was referred to Pascal as we wanted to switch mortgages. Although we were aware of what was involved, there were tips and advice Pascal gave us that was invaluable. He advised and directed us and offered his services but felt we were capable of completing the switch ourselves. The best money we’ve ever spent.

5
Grainne Sheils
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Pascal and his team are brilliant. They guided us through our mortgage application every step of the way. Very responsive, knowledgeable and friendly service. Would highly recommend.

5
Paul Tully
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We have been dealing with Pascal at Advice First since 2005. He has helped us so much through the years with our mortgage, Life Insurance, Income Protection and financial guidance. Pascal is so kind and explains everything so well. His attention to detail is second to none and always on hand if we need advice. I would highly recommend Advice First Financial Services.

5
Caroline & Gary McLaughlin

Frequently Asked Questions About Mortgage Applications

What exactly is a mortgage?

A mortgage is simply a long-term loan that’s used to pay for a house.

How do I start the application process?

There are a number of easy ways to begin your application:
Get in touch with a mortgage broker, who will do all the work for you or get in touch with the lenders directly. Obviously, we would recommend the mortgage broker route as they will shop around all the lender and provide you with the best options for you. I would suggest dealing with a fee-based broker though. If the broker is not charging a fee, then they will only deal with lender who pay them a commission, which means you only get options from a select number of lenders rather than the entire market.

Here are some tips on getting mortgage ready

What’s a fixed rate mortgage?

With a fixed rate mortgage, your interest rate and monthly repayments are fixed for a set time as agreed between you and the lender. You can choose the best time frame for you.

Although a fixed rate means your repayments cannot increase for a set period of time, your repayments will not fall during the fixed rate period. As a result, you could miss out on lower interest rates and lower repayments. Fixed rates may cost more over the long run, but they offer peace of mind as you know your repayments will not rise during the fixed rate period.

We would recommend speaking with a mortgage broker though, you can discuss all rate options and they will help you decided whether a variable rate fixed rate is right for you. They will also be able to do market research for you on the best rates available for you.

What’s a variable rate mortgage?

Variable rates offer the most flexibility. They allow you to increase your repayments, use a lump sum to pay off all or part of your mortgage or re-mortgage without having to pay any fixed rate breakage fees.

However, because variable rates can rise and fall, your mortgage repayments can go up or down during the term of your loan.

How much will my repayments be every month?

Your repayments will depend on how much you borrow, the term or length of your mortgage as well as the interest rate that you’re charged. See this handy online Mortgage Calculator for an indication of how much your monthly repayments might be. We would recommend speaking with a mortgage broker though, you can discuss all rate options and they will help you decided whether a variable rate fixed rate is right for you. They will also be able to do market research for you on the best rates available for you.

What’s the minimum amount I can borrow?

The minimum loan amount you can borrow for a mortgage approx. €40,000. The minimum loan amount for a top-up, can also be called a further advance, is €25,000.

What’s the maximum amount I can borrow?

When giving you a mortgage, lenders use different criteria to decide how much they are willing to lend you and they must follow specific Central Bank of Ireland rules when doing this.

The Central Bank of Ireland’s rules apply limits to the amount that lenders in the Irish market can lend to mortgage applicants. These limits apply loan-to-income (LTI) ratios and the loan-to-value (LTV) ratios for both family homes and buy-to-let properties and are in addition to the lenders’ individual credit policies and conditions. For example, a lender may have a limit to the percentage of your take home pay that can be used for mortgage repayments.

How long will my mortgage last for?

Every mortgage has a life span or term. The minimum term would be 5 years and you could also possibly qualify for the maximum term possible which is 35 years. For a family home the maximum term of the mortgage is determined by your age. The maximum to have the loan repaid is age 68 with some lenders and age 70 with others. For Buy to Let mortgages have a maximum term of 25 years.

A shorter term means you’ll pay your mortgage off quicker, but it also means your monthly repayments will be higher. It is good advice to clear your debts, including your mortgage, as quickly as you can, it is also important to have a life and have to money to do all the other things in life that are important. So, striking the right balance is very important.

What documents do I need to make a mortgage application?

You will need certain documents when you apply for a mortgage, and you should keep a copy of anything you give to a lender or broker.

Proof of ID, proof of address and proof of your Personal Public Service Number (PPSN)

Proof of income: latest P60, payslips, certified accounts if self-employed

Evidence of how you manage your money such as current and loan account statements for the last three to 12 months, depending on the lender

Her is Permanent TSB’s full list of documents required here.
Her is AIB’s full list of documents required here.
You can see that the lists are very similar, which is the same with all other lenders.
These lists will not be complete for everybody as they do not take account of your individual circumstances.

What’s a loan-to-value (LTV) ratio?

LTV, or loan-to-value, is all about how much mortgage you have in relation to how much your property is worth. It’s normally a percentage figure that reflects the percentage of your property that is mortgaged, and the amount that is yours (the amount you own is usually called your equity).

For example, if you have a mortgage of €150,000 on a house that’s worth €200,000 you have a loan-to-value of 75% – therefore you have €50,000 as equity.
So, the lenders set LTV limits, which means you need to have a deposit of a certain amount before you can get a mortgage. There are different limits in place depending on what category of buyer you are.

  • First-time buyers need to have at least a 10% deposit
  • Second and subsequent buyers need to have at least a 20% deposit
  • Buy-to-let buyers need to have at least 30% deposit

Lenders have a limited amount of discretion when it comes to these limits and in a calendar, year can make exceptions for:

  • 5% of the value of mortgages for first-time buyers
  • 20% of the value of mortgages to second and subsequent buyers
  • 10% of the value of buy-to-let mortgages

These rules don’t apply to switcher mortgages and housing loans for restructuring mortgages that are in arrears and pre-arrears.

What is the Loan to income limits?

A limit of 3.5 times your gross annual income applies to applications for a mortgage for a family home. This limit also applies to those in negative equity applying for a mortgage for a new property, but not those borrowing for a buy-to-let property.

Lenders have a certain amount of discretion when it comes to mortgage applications. For first-time buyers, 20% of the value of mortgages a lender approves can be above this limit and for second and subsequent buyers 10% of the value of those mortgages can be above this limit.

How much can you afford to borrow?

When making a mortgage application it can be tempting to apply for the maximum amount possible. However, you need to make sure you will be able to cope with future events such as an increase in interest rates, having children, redundancy or illness.

You can use this budget planner to work out what you can afford to repay each month and make sure to include a regular amount for ‘unforeseen expenses’. You can use our mortgage calculator to see how much your monthly mortgage repayments would be.

If you have other loans or debt, your lender may offer you a lower amount, ask that you pay off these loans or refuse your application.

The shorter the term of your mortgage, the higher your monthly repayments, but you will pay less interest in total. With a longer-term mortgage your monthly repayments will be lower, but you will pay more in interest over the lifetime of the loan.

Example:

MORTGAGE AMOUNTTERMINTEREST RATEMONTHLY REPAYMENTSTOTAL COST OF CREDIT
€200,00020 years3%€1,109€66,206
€200,00025 years3%€948€84,526
€200,00030 years3%€843€103,554
Difference in cost of credit between 20- and 30-year terms€37,348

Even a small difference in interest rates can have a big impact on the overall cost of a mortgage.

MORTGAGE AMOUNTTERMINTEREST RATEMONTHLY REPAYMENTSTOTAL COST OF CREDIT
€200,00020 years3%€1,109€66,206
€200,00020 years2.5%€1,059€54,353
Difference in cost of credit between interest rates€11,853

Example:
When you apply for your mortgage, and over its lifetime, it is important to get the lowest rate possible as it can lead to significant savings.

As well as mortgage repayments there are other costs to consider when it comes to buying a home

What are the other Mortgage fees and charges?

When buying a property, or switching your mortgage, it is not just your regular mortgage repayments you need to think about. There are a number of other costs involved which you should be aware of and ask your lender about. Some of these can be reduced or avoided by shopping around.

They include:

  • Brokers’ fees – some brokers charge a fee to arrange your mortgage or for mortgage advice. This might be a percentage of the mortgage amount or a flat fee. Not all brokers charge a fee so if you are planning to use a broker it is important to ask about this and to shop around. If a broker is not charging a fee, check with them what lenders they advise on. They may only work with lenders who pay them commission and you may not get a full market comparison.
  • Estate agent fees – if you are selling a property and using an estate agent you will have to pay a fee for this service. It is usually between 1% and 2.5% but can also be a flat rate.
  • Solicitor’s fees – to look after the legal aspects of your mortgage a solicitor will charge a flat fee or a percentage of the mortgage amount, typically 1% to 2%. It is worth shopping around a few solicitors.
  • Valuation fee – this is paid to a professional valuer to estimate a property’s market value and is required by the lender as part of your mortgage application. A valuation is valid for a short period of time, typically four months. You will need to get an up-to-date valuation of your property if you want to switch mortgage. Valuation fees typically run between €150 and €185.
  • Structural survey fee – a structural survey is done to find out the condition of a property. If any issues arose during the valuation of the property or it is very old, your lender may insist on a structural survey. Even if your lender does not require it, you may want to get a survey anyway to be sure there are no problems with the building. The amount you will pay can be dependent on the type, age and location of the property. It is not always a requirement for the lender, but it is always recommended to have a structural survey done for your own peace of mind.
  • Stamp duty – this is a tax payable on documents when you transfer ownership of a property. For residential property it is charged at 1% of the property value up to €1 million and 2% for anything above that.
  • Local Property Tax – this tax, collected by Revenue, is charged on all residential properties and came into effect in 2013. It is a self-assessment tax, and you calculate what is due based on your own assessment of the market value of your property. It can be paid in a lump sum or spread out over the year.

You should take the above into account when you are working out how much you will be able to borrow.

What is the stamp duty payable on mortgages?

Stamp duty is payable at 1% on properties up to the value of €1 million euro and 2% on properties over this amount.

What are lenders' normal lending criteria for a mortgage?

Every lender will look at various criteria before deciding whether to approve a mortgage. Some of the main factors that are taken into account are:

  • A good credit history.
  • Being aged 18 or over.
  • Age not greater than 70 at the end of the mortgage term. With some lender this age is 68.
  • Ability to repay – as a guide mortgage repayment on all loans including your mortgage should not exceed 35% of your net income
  • Secure employment.
  • Continuous employment at least 12years.
  • Self-employment for at least 2 years, some lenders require 3 years.
  • Good bank account management

With all lenders the primary focus is on your repayment capacity.

How much of a deposit do I need?

All lenders must follow Central bank deposit rules, which require a 10% deposit for first time buyers. So, if the value of your property is €200,000, you’d need a deposit of €20,000. This deposit can come by way of a gift, or part gifted, if you are lucky enough to have some-one willing and able to help you out. Borrowing for your deposit will not be acceptable to your mortgage lender, no matter where you are borrowing for.

What else should I bear in mind when taking out a mortgage?

You’ll generally need to arrange home insurance and mortgage protection before drawing down your loan.

Home insurance is a property insurance which covers private homes, buildings and contents. The cost of home insurance often depends on what it would cost to rebuild your house and how much it would cost to replace all of the contents of the house. The replace value of your property may be more than the purchase price.

When taking out a mortgage you’ll also need to consider how it’ll be paid off in the unlikely event of your death before the mortgage has been fully repaid. When you get a mortgage to buy your home, you’ll generally be required by your lender to take out mortgage protection. This is a particular type of life assurance taken out for the term of the mortgage and is designed to pay it off on the death of the borrower or joint borrower before the end of the mortgage term.

What is the timeline for the mortgage process?

Wherever you are on your mortgage journey, whether you’re ready to make an application, or just want to ask some questions – we’re here to support you so book an appointment today with our mortgage team!

We’ll outline the mortgage process and the required documents you’ll need for your application and you can then gather and submit the documents required at a time that suits you, allow 1-2 weeks for gathering these documents.

Once the lender receives your application and supporting documentation, they will get back to you in 3 working days to let you know if it’s ready to go to our underwriting team for a full assessment, or if they need any further documents or information from you first.

Once they submit the documents to their underwriting team for full assessment, they will let you know if they can approve your application within 10 working days. In the rare event that they can’t come to a decision in that timeframe, they will be in touch to let you know and to inform you of when they will have a decision.
If you are using a mortgage broker the lenders will communicate this update to them who will in turn communicate with you.

Once your application for credit is approved, (called approval in principle, AIP) and you have found your home, you will be required to arrange for a valuation of your property. A credit check will also be undertaken on all applicants of the mortgage, and you will need to arrange Life Insurance and Home Insurance. Your lender will issue the loan offer to your solicitor and once you sign the documents, your solicitor will arrange the transfer of funds and collection of your keys to your new home.

Call us today in Letterkenny: 074 910 3938